The Threshold Foundation (TF) was established in 1981 by business consultant/social activist Richard Perl and heir/philanthropist Joshua Mailman. Together they convened, in a picturesque outdoor setting in Colorado, a group of 22 wealthy young activists like themselves to brainstorm how they could best utilize their financial resources to advance policies that would, in their estimation, promote the public good. The members of this group called themselves "The Doughnuts," a name derived from a circular cloud that purportedly appeared above the meditation circle they had formed during their outdoor council. According to Ron Arnold, executive vice-president of the Center for the Defense of Free Enterprise, these activists "contemplated 'the sacredness of the earth as a living organism' and their duty to save it and its indigenous peoples through joint use of their inherited wealth."

During TF's early years, each "Doughnut" swore an oath to absolute secrecy about the projects they funded and the quasi-religious objectives they shared. Providing a window into the mystical mindset of TF's founding partners, Ron Arnold reports:

"[T]he entire group attempted to buy a gypsum mine in Arkansas to provide crystals to encircle the U.S. White House and Moscow's Kremlin in a magical crystal peace spell; one Doughnut ... founded the Institute for Soviet-American Relations in 1983 to prevent World War III; Richard Perl ... who was still in Columbia Law School (with a business card saying 'Peace Entrepreneur'), would become CEO of Deepak Chopra's holistic health corporation ..."

In 1984 the Tides Foundation and its then-CEO, Drummond Pike, took over the management duties at TF and incorporated it two years later. From that point forward, Threshold veered away from its earlier mysticism and became a more businesslike entity.

Today TF describes itself as “a progressive foundation and a community of individuals” who “contribute their time, money and energies to support progressive social change through volunteer-based philanthropy.”

TF seeks to “serve the social change movement” by funding national and international non-profit organizations focused on “social justice, environmental preservation, humane economic systems, and the peaceful coexistence of individuals, communities and cultures.” Directing the Foundation's pursuit of these objectives are its two grant-making committees:

1) The Sustainable Planet Committee (SPC) asserts that human industrial activity is the major cause of potentially catastrophic “climate change.” To address this threat, SPC strives to “transfor[m] both human culture and technology to live within the physical limits of the local and global ecosystems … to preserve biodiversity and prevent extinction.” Key to this effort is the deployment of “new clean technologies”—i.e., wind and solar.

2) The Justice and Democracy Committee (JDC) supports organizations working to protect the “human rights [of] youth impacted by the [American] criminal-justice and drug-policy systems” that are allegedly rife with racial injustice. According to JDC, "The prison-industrial complex is a self-perpetuating system based on the subjugation of an increasing segment of our communities through racial and economic scapegoating," creating "immediate material gain for corporations who build and manage prisons.” In particular, says the Committee, the war on drugs “has resulted in the institutionalized persecution of Black, Latino and Native American young people ushered into the criminal-justice system under the guise of fighting drugs.” By injecting cash into community-organizing and coalition-building initiatives, JDC also works to “expan[d] political rights for those who live in historically disenfranchised communities.”

Currently, TF has three active Funding Circles—i.e., interest groups that convene when there is both member interest in a particular issue area and an urgent need in the non-profit field to address it. One of these, the Election Integrity Funding Circle, is closely aligned with the aforementioned JDC and works “to eliminate voter suppression and barriers to voting.” Among this Funding Circle's priorities are the restoration of voting rights for convicted felons, and the elimination of requirements that voters show proof of identity and citizenship at their polling places.

The Queer Youth Funding Circle, which has been housed at the Liberty Hill Foundation since 2002, makes multi-year, $100,000 grants to organizations “working to improve the quality of life among gay, lesbian, bisexual, transgender, queer and questioning (GLBTQQ) youth.”